Category Archives: Regulatory

Taking Stock of the Regulatory Sandbox

The concept of the regulatory sandbox (“Sandbox”) was first introduced over 4 years ago by the UK Financial Conduct Authority (“FCA”) to offer: “a safe space in which businesses can test innovative products, services, business models and delivery mechanisms without immediately incurring all the normal regulatory consequences of pilot activities.”…

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Market Structure Impediments May Limit Regtech Potential

The use of technology to create process efficiencies and enhanced user experiences has been fully entrenched in the financial services sector for some time.  In recent years, the pace of change has quickened with the introduction of a kaleidoscope of new technologies such as data analytics, cloud computing, blockchain, machine…

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Using Blockchain to Solve Regulatory and Compliance Requirements

Distributed ledger technologies have the potential to change the current financial system, whether in terms of reduced costs, greater reliability or more transparency. To create a successful ecosystem, it is necessary to have, or have access to, the right ingredients for success. These includes: suitable user cases, the talent to…

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Regulatory Sandboxes Come in all Shapes and Sizes

The digital wave is hitting the financial service industry at an extraordinary rate creating opportunities but also challenges for the financial services ecosystem. Consumers have higher expectations and want better access, transparency and delivery options. New technologies such as blockchain are unravelling traditional workflows and have the potential to represent…

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Off the Hook or Time to Prepare? Canada’s Derivative Clearing Rules Close to Final

In February, the Canadian Securities Administrators (CSA) published a revision to National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives (proposed clearing rule) for a 90-day comment period. This proposed clearing rule sets out when certain over-the counter (OTC) derivatives are required to be cleared through a recognized or exempt…

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Best Execution in an Increasingly Complex Market

Several regulators around the world are revisiting their rules and guidelines for Best Execution. This white paper is intended to provide an overview of best execution in Canada and other jurisdictions, and the ways in which best execution is evolving as the Canadian markets continue to grow in complexity. It…

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Canada Drives the LEI Mandate Forward

Due to the size of the Canadian marketplace, the country’s regulators typically rely on other jurisdictions to take a leading role when it comes to global regulatory initiatives. Canada often provides leadership through its input in the early stages of regulatory reform through its participation in international committees and by…

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Summary of the Recent Consultation Paper on Draft Regulations for Reporting of Derivative Contracts – Singapore

The Monetary Authority of Singapore released a consultation paper late last month on their proposed regulations for OTC derivative reporting.  The key points have been summarized in the table below. Points of note are that Singapore will require collateral information to be reported and that both parties to a trade…

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One Small Step for Provincial and Model Rules, One Giant Leap for Trade Reporting and Product Determination

Last week, the Canadian Securities Administration (CSA) ‘Committee’ published two consultation papers that contain the proposed provincial rules and updated model rules for the reporting of derivatives transactions to trade repositories (TRs). The updated model rules clarify and tighten their policy stance yet do not deviate significantly from the proposed…

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Innovation Trumps Complacency – SEF Rules Level The Playing Field in OTC Derivative Reform

Recently, a client asked us what we thought were the three most important factors that would contribute to the success of an electronic venue. It turns out that this was a timely and relevant question given the release of the final rules on swap execution facilities (SEFs). While these rules…

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Finding their Feet in the Fog: Central Reporting Gone Adrift – Part II

The article is a follow up from my December blog titled: Getting Lost in Translation: Central Reporting Gone Adrift. http://balmoraladvisorygroup.com/blog/?p=229 My concerns regarding regulatory readiness for the central reporting obligation mandated by the OTC derivative reform were validated this week when CFTC Commissioner Scott O’Malia spoke at a Sifma seminar…

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Keeping Calm and Carrying On: Top 10 Newsworthy Events in Asia of 2012

With 2012 just behind us, it is important to recognize there are two sides to the story of this past year in the markets. On the one hand, no one will dispute that it has been a very difficult year. Trading volumes are down, broker dealers are being challenged to…

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Getting Lost in Translation: Central Reporting Gone Adrift

Over the course of this year, I have often wondered if the G20 leaders who met in Pittsburgh in 2009, discussed the state of the global OTC derivatives market and proposed sweeping reforms truly understood the scope and complexity of this undertaking. In their quest to make the world of…

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Market Integrity Rules Take Over Down Under

Later last year, Australian brokers opened a surprise early Christmas gift: an invoice for a new financial levy to recover the costs of moving market supervision from the Australian Stock Exchange to the Australian Securities Investment Commission (ASIC). This year, they have unwrapped yet another gift from ASIC: new market…

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Breaking Through the Clouds: The Launch of NASDAQ OMX’s FinQloud

NASDAQ OMX’s new product FinQloud has all of the ingredients to be an industry game-changer. It is relevant, timely and innovative. NASDAQ OMX has taken the burdensome task of regulatory compliance and added a sexy twist to it by teaming up with Amazon to provide its customers with a secure,…

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Ready SET Go!: A Strong Start for the Thai Stock Exchange

As I reviewed the Thai Stock Exchange (SET) 2011 Annual Report on-line, the first words that caught my attention were “Driving to Success”. These three words encapsulate a view that I have developed regarding the SET over the last year. Although the Exchange has faced overseas economic challenges, a flood…

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Shifting the Focus to the Little Guy: Update on OTC Derivative Reform

True to their word, the Monetary Authority of Singapore (MAS) continues to slowly piece together their plans for OTC derivative reform. Their latest installment was released in early August when they issued the second round of feedback from market participants. This response focuses on the central clearing and reporting of…

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Taking It Step By Step: Developments at the Monetary Authority of Singapore on OTC Derivative Reform

Last month, the Monetary Authority of Singapore (MAS) released their response to feedback following a consultation period with market participants on the regulation of over-the-counter (OTC) derivatives. This paper followed their proposal that was released in February. The response marks another step towards finalizing the changes needed to the Securities…

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Carving Out their own Path for Change: Status of OTC Derivative Reform In Australia

The Council of Financial Regulators in Australia broke their silence last week and introduced their policy proposals for meeting the G20 objectives to reduce systemic risk in the ‘over-the-counter’ (OTC) derivative market. We have become accustomed to Australia taking the lead in the Asia-Pacific region with regulatory change so their…

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Slowing Down the Speed of Profitability: Regulators Attempt to “Control” High Frequency Trading (HFT)

I came across an article in Business Week about a new transatlantic fibre optic line that will connect financial markets in London and New York at record transmission speeds. When it opens for service in 2013, ‘Project Express’ will be the fastest cable across the Atlantic; reducing the time it…

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Singing Its Own Tune: Singapore’s Proposed OTC Derivative Reform

In February, the Monetary Authority of Singapore released their consultation paper on over-the-counter (OTC) derivative reform. At first glance, the proposed reform may appear soft and flexible compared to the hard and rigid structures taking shape in the West. However, when you consider their proposal in the context of the…

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Korea Update: Risks of a Return to The Hermit Kingdom for Derivatives?

This month, we have a special contribution from Chris Price, MD of AsiaEx Consulting. AsiaEx Consulting is a specialist consultancy committed to providing expert, practical and independent advice on the complex and fluid world of market structure in Asia. Chris writes about the proposed regulatory reforms in Korea and the…

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Balmoral Advisory’s Vision for 2012

Balmoral Insight–As the market and regulatory landscape takes shape in 2012, Balmoral Advisory’s monthly newsletter will offer you their informative insights and thoughtful perspectives on the most newsworthy events of the previous month. For January, our top stories are: The Year of The Dragon: China Breathes Fire into their Capital…

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The Year of the Dragon: China Breathes Fire into their Capital Markets

China burst into the New Year by introducing new reforms that will further liberalize their capital markets. Among the highlights was the introduction of a new initiative, the Centralized Securities Lending Exchange (CSLE) that will facilitate short selling by lending shares to qualified domestic fund managers for a fee. It…

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Alternative Trading Venues in Asia – One Size Does Not Fit All

If you take a step back and evaluate the purpose of an exchange, its primary function is to raise capital and its secondary function is to provide price discovery and liquidity to the market. A country in the early stages of its development life cycle will be more focused on…

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About The Author

Donna Bales
is a product development professional with a proven track record of managing complex capital market industry initiatives during times of significant market change and market structure reform. Donna is the founder and managing director of Balmoral Advisory, a boutique advisory firm that works with exchanges, regulators, technology firms, market participants and market data vendors to identify and evaluate business opportunities, understand and respond to changing industry/market dynamics and develop and implement strategies and solutions that make sense now and in the future. In addition she acts as a strategic advisor to an international consultancy firm, CollegeHill Asia and sits on the Board of 3Q Innovation, a non-profit focused on retaining and replacement of older workers who face protracted unemployment. Originally from Canada, Donna holds a bachelor degree in Economics from the University of Western Ontario.